FINANCIAL ANALYSIS

Binh Minh Plastics Joint Stock Company

CF-T321WSB-4
Lecturers: Dr. Vo Hong Duc & Dr. Tu Thi Kim Thoa
Group 2
 Table of contents

I. Introduction 1
II. Analysis of profit/loss and balance sheet 2
1. Balance sheet 2
2. Income statement 4
III. Ratio Analysis 7
1. Liquidity ratios 7
2. Efficiency ratios 9
3. Long-term solvency ratios 12
4. Profitability ratios 14
5. Market value ratios 16
IV. Conclusion 18
V. References 19
VI. Appendix 22

Presentation video: https://www.youtube.com/watch?v=escbaV5dMa4

Excel calculations: https://bit.ly/3rzP00H
 I. Introduction
Binh Minh Plastics Joint Stock Company (JSC) was founded in 1977 and is headquartered
in Ho Chi Minh City, Vietnam. The company’s official website is
https://www.binhminhplastic.com.vn/ and its postal code is 700000. The company is involved in
many fields, especially in the consultancy and execution of water supply and drainage works as
well as engineering and construction.
The Company's Business Registration Certificate has been modified many times, and the
most recent adjustment is the Certificate Business registration number 0301464823 on August
22nd, 2017. The first Business Registration Certificate and Adjustment Certificates were issued by
the Ho Chi Minh City Department of Planning and Investment.
● The company's independent (external) audit firm:
Binh Minh Plastics Joint Stock Company has signed an agreement of audit services with
KPMG Co. Ltd. KPMG is one of the most recognizable and professional companies that provide
accounting service in Vietnam. With its operation in 146 countries and territories, KPMG is
committed to quality and integrity through its global organization, especially in Vietnam.
● The company's primary line(s) of business:
Binh Minh Plastics is a Vietnamese market-leading company trading:
- Plastic pipes and fittings for water supply and drainage (PP-R pipes and fittings
- PP-R fittings, etc.)
- Telecommunication
- Electricity
- Industrial and civil construction
● Size of the company:
The size of Binh Minh JSC in 2020 is 28.74, calculated using the excel function ln(total
assets). Companies owning over 100 billion VND of total capital and having more than 300
employees are defined as large enterprises (Luật Hoàng Phi, 2021). With its total assets of 2,128
billion VND and 1,407 employees, Binh Minh JSC is characterized as a large enterprise. Indeed,
in its 2020 report, the company is proud of maintaining its leading position in the national market
despite the difficulties and economic downturn brought by the Covid-19 pandemic (Binh Minh
Plastics Joint Stock Company, 2021).
● The ticker symbol and the stock exchange on which its shares are listed:
The ticker symbol for Binh Minh Plastics Joint Stock Company is BMP and it has been
listed in the Ho Chi Minh City Stock Exchange (HOSE) since 2006.
● Membership of the company's Board of Directors:
1. Mr. Sakchai Patiparnpreechamid - The Chairman of BOD (non-executive member).

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 2. Mr. Nguyen Hoang Ngan - The Deputy Chairman of BOD and General Director -
owns the total number of 618,550 voting shares and other securities issued by the
Company.
3. Mr. Chaowalit Treejak - Appointed as BOD Member and Deputy General Director
in replacement of Mr. Wisit Rechaipichitgool from July 1st 2021.
4. Mr. Poramate Larnroongroj - BOD Member (non-executive member).
5. Mr. Phan Khac Long - Independent Director.
● The majority-owned subsidiaries of the company:
Since September 18, 2006, Binh Minh Plastic Company has solely established one wholly-
owned subsidiary named “Northern Binh Minh Plastic One-member Limited Company (NMB)”.
The subsidiary is located in Hung Yen province and contains a total current charter capital of 155
billion VND.
II. Analysis of profit/loss and balance sheet
1. Balance sheet
A common-size balance sheet is a balance sheet that displays both the numeric value and
relative percentage for total assets, total liabilities, and equity accounts. A common-size financial
statement displays line items as a percentage of one selected or common figure that helps investors
spot trends that a raw financial statement may not uncover. BMP and NTP’s common-size balance
sheet is shown as follows:
Binh Minh Plastics Joint Stock Company

Common-Size Balance Sheet

As at 31 December, 2018, 2019, and 2020

2018-2019 2019-2020
Codes 2018 2019 2020 change change

Total current assets 100 64.24% 52.70% 70.43% -16.88% 41.75%

Total non-current assets 200 35.76% 47.30% 29.57% 34.07% -33.69%

Total assets 270 100% 100% 100% 1.34% 6.06%

Liabilities and Owner's

equity 440 100% 100% 100% 1.34% 6.06%

Total current liabilities 310 12.75% 12.55% 17.46% -0.28% 47.60%

Total non-current
liabilities 330 0.00% 0.81% 0.78% 100% 1.77%

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Total stockholders' equity 410 87.25% 86.64% 81.76% 0.64% 0.09%

Tien Phong Plastic Joint Stock Company

Common-Size Balance Sheet

As at 31 December, 2018, 2019, and 2020

2018-2019 2019-2020
Codes 2018 2019 2020 change change

Total current assets 100 54.61% 51.91% 43.10% -11.26% -28.96%

Total non-current assets 200 45.39% 48.09% 56.90% -1.09% 1.26%

Total assets 270 100% 100% 100% -6.64% -14.43%

Liabilities and Owner's

equity 440 100% 100% 100% -6.64% -14.43%

Total current liabilities 310 48.96% 40.73% 32.62% -22.34% -31.47%

Total non-current
liabilities 330 4.85% 2.87% 0.91% -44.68% -72.89%

Total stockholders' equity 410 46.19% 56.40% 66.47% 13.98% 0.85%

1.1 Total assets

For total assets, BMP and NTP had an inverse trend. The total current assets of BMP saw
growth from 64.24% to 70.43%, and the total non-current assets had a decline rate of 12.48% in
2018-2020. Meanwhile, NTP had the opposite features when the total assets of the company
declined from 54.61% to 43.10% and the total non-current assets rose to 56.9% from 45.39% in
the same period. In detail, there was a rise of 322.2 billion VND in the total current assets and a
drop of 111.6 billion VND in non-current assets of Binh Minh Plastics Joint Stock Company.
Additionally, when comparing the total assets of the two companies, Tien Phong Plastics JSC had
a much higher amount of assets than Binh Minh JSC. Overall, Binh Minh Plastics Joint Stock
Company had a constant growth of approximately 210.5 billion VND over the years.
1.2 Total liabilities
With regard to liabilities, Binh Minh Plastics Joint Stock Company’s total current liabilities
and total non-current liabilities experienced an upswing respectively from 12.75% to 17.46% and
from 0% to 0.78% from 2018 to 2020. In addition, its total current liabilities and total non-current
liabilities decreased by a great amount of roughly 1.1 billion VND and 200.9 billion VND. In the
meantime, Tien Phong Plastic Joint Stock Company saw a fall-off in the two features from 48.96%

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to 32.62% and from 4.85% to 0.91%. Nonetheless, when putting two companies in comparison,
Tien Phong Plastic Joint Stock Company had a much higher value of both accounts.
1.3 Total stockholders' equity
Furthermore, Binh Minh observed a decrease in total stockholders' equity when this data
dropped from 87.25% to 81.76%. However, this percentage is still way higher than its rival. On
the other hand, Tien Phong Plastic Joint Stock Company’s total stockholders’ equity spotted a rise
from 46.19% in 2018 to 66.47% in 2020. This indicated that the two companies were making a lot
of profits, including obtaining additional equity financing by issuing stock.
In short, the common-size balance sheet indicated a clearer picture of the two companies’
financial status relating to assets, liabilities, and shareholder equity throughout the period of 2018-
2020. When put together in comparison, the data showed that BMP had a constant growth in its
finances.

2. Income statement
Common-size income statement is one in which each account is stated as a proportion of
revenue or sales, therefore, it indicates how each component affects a company's financial position
(Tuovila, 2020).
Binh Minh Plastics Joint Stock Company

Common-size Income Statement

For the year ended 31 December, 2018, 2019, and 2020

2018-2019 2019-2020
Code 2018 2019 2020
change change

Total revenue 01 100% 100% 100% 5.16% 8.23%

Revenue
02 5.09% 0.13% 0.31% -97.33% 163.54%
deduction

Net revenue 10 94.91% 99.87% 99.69% 10.66% 8.03%

COGS 11 73.79% 77.12% 73.16% 9.90% 2.67%

Gross profit 20 21.12% 22.75% 26.53% 13.30% 26.21%

Net operating
30 12.81% 12.17% 13.92% -0.09% 23.77%
profit

Total expenses
(before income 8.95% 11.47% 14.31% 34.89% 35.01%
taxes)

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Non-operating
40 0.02% 0.02% 0.05% -21.38% 236.21%
gains

Net income 10.35% 9.73% 11.12% -1.13% 23.61%

2018-2019 2019-2020
Code 2018 2019 2020
change change

EPS 70 5,224 5,164 6,384 -1.15% 23.63%

Tien Phong Plastic Joint Stock Company

Common-size Income Statement

For the year ended 31 December, 2018, 2019, and 2020

2018-2019 2019-2020
Code 2018 2019 2020
change change

Total revenue 01 100% 100% 100% 5.60% -2.98%

Revenue
02 0.33% 0.60% 3.45% 92.36% 454.91%
deduction

Net revenue 10 99.67% 99.40% 96.55% 5.31% -5.75%

COGS 11 70.32% 69.44% 66.68% 4.29% -6.84%

Gross profit 20 29.35% 29.96% 29.88% 7.78% -3.23%

Net operating
30 8.30% 9.77% 11.21% 24.26% 11.39%
profit

Total expenses
(before income 21.85% 20.93% 19.54% 1.14% -9.39%
taxes)

Non-operating
40 0.08% 0.07% 0.05% 0.91% -29.26%
gains

Net income 7.31% 8.54% 9.62% 23.38% 9.33%

Code 2018 2019 2020 2018-2019 2019-2020

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 change change

EPS 70 3,715 4,167 3,387 12.17% -18.72%

2.1. Total revenue

As shown, the total revenues of BMP and NTP were both set as 100% throughout the 3
consecutive years. However, there were numerous differences between the two companies since
the total revenues of BMP were numerically less in 2018 and 2019 compared to NTP (Appendix).
Contradictorily, 2020 observed a rising trend of BMP over NTP, 4,700 billion VND compared to
4,646 billion VND. Furthermore, the change in BMP’s total revenue has increased considerably
from 5.16% during 2018-2019 to 8.23% during 2019-2020 while its competitors underwent a
downturn from 5.60% to -2.98%. This implies that BMP has actively kept its business growing
and hence, not being seriously affected by the situation of COVID-19.
2.2. COGS
BMP’s costs of goods sold accounted for immense percentage of the total revenue which
was all above 70% and decreased year by year, reflecting business profitability and affecting its
taxable income as well as gross profit. Deduction from 9.90% in 2018-2019 to 2.67% in 2019-
2020 might imply that the company had inefficiencies in production or problems with the sales
process. However, the decrease should be interpreted as normal since NTP also experienced
similar circumstances when moving from 4.29% to even -6.84%.
2.3. Total expenses (before income tax)
Total expense was calculated before income taxes by totalizing BMP’s financial expenses,
selling expenses, administrative expenses and other expenses incurred. BMP was exposed to a
gradual rising trend from 8.95% (in 2018) to 11.47% (in 2019) and ended up at 14.31% (in 2020),
which emphasizes that it had to spend more to generate revenue. Despite the increase in expenses,
these accounts were only of small proportion based on total revenue compared to its competitor,
NTP because this company had a range above 19% in all three years.
2.4. Non-operating gains
The difference between Other income and Other expenses results in Non-operating gains
or losses. BMP realized positive non-operating gains in three years with 0.02% in both 2018, 2019
and a slight increase to 0.05% in 2020. Noticeably, the change during 2018-2019 significantly
raised from -21.38% to 236.21% during 2019-2020, implying that BMP has made a large amount
of income from non-operating activities.
2.5. Earnings per common share (EPS)
Finally, EPS represents the company’s net profit divided by the number of common shares
outstanding. Revealed in annual reports, BMP’s EPS fluctuated from 5,224 VND (in 2018) to
5,164 VND (in 2019) and accordingly 6,384 VND (in 2020). With higher EPS than its rival in the
industry - NTP’s climax point value in the three years was 4,167 (in 2019), BMP’s stock has had
higher value, highlighting the probability of earning more for each share. Again, BMP’s EPS

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percentage change encountered -1.15% and then 23.63% while NTP dropped from 12.17% to
noteworthily -18.72%. This outstanding event once again confirmed that BMP has grown more
lucrative over time with greater earnings to deliver to shareholders (Corporate Finance Institution,
2020).
In conclusion, this common-size income statement had shed insight on BMP’s financial
health as it analyzed the company’s performance period 2018-2020 with yearly corresponding
revenue from sales of goods and expenses statistics. Compared subsequently to NTP, it showed
that BMP was performing well relative to the industry.

III. Ratio Analysis

1. Liquidity ratios
Liquidity ratios are the indicator of a firm's ability to pay its bill over a short period of time
without undue stress and are concerned primarily with Current Assets and Current Liabilities. All
three types of ratios of BMP are illustrated analytically below:
1.1 Current ratio
Firstly, the current ratio moved from 5.04 times in 2018 to 4.20 times in the next year and
continually declined to 4.03 times in 2020, implying BMP’s decreased ability to cover short-time
obligations out of current assets. NTP experienced the opposite direction when it rose from 1.12
times (in 2018) to 1.27 times (in 2019) and 1.32 (in 2020). This showed that NTP was able to
actively manage cash flow and solvency of short-term liabilities. Though measures of both are in
desirable situations, the distance in ratio of the two companies between approximately 4 (BMP)
and 1 (NTP) suggested that BMP’s current assets account was largely greater than its current
liabilities and for every unit in liabilities, BMP had a higher unit of asset.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
Current ratio = (times)
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
1.2 Quick ratio

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 Secondly, the measures of BMP’s quick ratio were quite stagnant. It is measured by the
subtraction of current assets and inventories, divided by current liabilities. The ratio dropped from
3.46 (in 2018) to 2.93 (in 2019) but it climbed up to 3.28 (in 2020), leading to a significant change
in quick ratio from negatively -0.53 during 2018-2019 to -0.35 during 2019-2020. Considering
NTP, quick payment ratio in 2019 increased from 0.7 times in 2018 to 0.81 times in 2020,
reflecting the high liquidation in cash and cash equivalents that NTP can pay short-term liabilities
immediately. However, these figures (by <1) show that there were insufficient current assets to
satisfy NTP’s existing liability obligations.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

Quick ratio = (times)
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

1.3 Cash ratio

Finally, BMP’s liquidity is highlighted by its cash payment ratio - the most liquid asset to
guarantee BMP’s payment obligations. Obviously, there was a downward trend from 1.15 times
in 2018 to 0.88 times in 2019 and then 0.37 times in 2020. The ratio of 0.37 in 2020 means that
each unit of short-term liabilities was backed by 0.37 units of cash. In this case, BMP can assure
the payment of short-term loans by selling short-term assets while incurring essentially little
liquidity risk. However, the change in stage 2018-2019 to 2019-2020 decreased from -0.27 times
to -0.52 times and was resulted from two main reasons: there were declines in cash and cash
equivalents while the current liabilities account was rising tremendously in 3 years. In contrast,
NTP had an upward movement from 0.03 times to 0.16 times and then 0.17 times, stating the
increasing potential of converting its assets to cash regularly within 90 days when obliged to pay
debt. But overall, BMP had a higher cash ratio compared to its rival, cultivating more trust from
investors.

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 𝐶𝑎𝑠ℎ 𝑎𝑛𝑑 𝐶𝑎𝑠ℎ 𝑒𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠
Cash ratio = (times)
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

2. Efficiency ratios
Efficiency ratios, which are also called asset management ratios, show how efficiently a
firm uses its assets to generate sales. For Binh Minh Plastics JSC, all three inventory turnover,
receivables turnover, and total asset turnover ratios had experienced growth during the period of
2018-2020.
2.1 Inventory turnover ratio
In detail, the inventory turnover ratio, which is the rate at which a company's inventory is
sold and replaced during a given time period, increased from 5.37 times to 8.67 times from 2018
to 2020 due to the growth of cost of goods sold in this period, which is a good thing since it proves
that the company was selling goods quickly, and there was considerable demand for their products.
Meanwhile, Tien Phong Plastic Joint Stock Company witnessed a slightly smaller growth
compared to Binh Minh Plastics JSC from 3.20 times to 4.81 times in the three years.

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 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑
Inventory turnover = (times)
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

2.2 Receivables turnover ratio

When it comes to the receivables turnover ratio, which is a financial measure that indicates
how many times a company collects its receivables during a certain period There was an inverse
ratio between the growth of total sales and the decline of accounts receivable that led to a notable
growth from 6.89 times in 2018 to 14.57 times in 2020. This is a positive sign because the company
was able to collect receivable payments faster and used this cash flow to pay its own bills more
easily. In the meantime, Tien Phong Plastic JSC had a rise of 2.78 times. This showed that a BMP’s
collection of accounts receivable was more efficient and the company had a higher proportion of
quality customers who paid their debts more quickly than NTP’s customer base.

𝑆𝑎𝑙𝑒𝑠
Receivables turnover = (times)
𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
2.3 Days’ sales in inventory and Days’ sales in receivables
Moreover, we examine the days’ sales in inventory, which indicates how long it takes to
work off a company's current inventory, and days’ sales in receivables, which shows how long it
takes a company to collect its receivables on average. As inventory turnover and receivables
turnover ratios both increased, the days’ sales in inventory and days’ sales in receivables, which
are inversely related, declined. Both of these two ratios decreased respectively, from 67.95 days
to 42.08 days and 55.82 days to 25.13 days, which indicated that the businesses were productive.
Tien Phong Plastic Joint Stock Company also shared similar trends. This company had 38.06 days
decrease for its days' sales in inventory and 29.31 for days' sales in receivables.

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 365 𝑑𝑎𝑦𝑠
Days' sales in inventory = (days)
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
365 𝑑𝑎𝑦𝑠
Days’ sales in receivables = (days)
𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟

2.4 Total asset turnover ratio

Furthermore, the total asset turnover ratio, measuring the value of a company's sales or
revenues relative to the value of its assets, experienced a steady growth when it grew from 1.47
times to 1.52 times and then to 1.56 times during the 3-year period, which shows that the company
was effective at generating revenue from its assets. At the same time, Tien Phong Plastic Joint
Stock Company also had an increase of 0.27 times in 2020 after its growth by 0.12 times in 2019.

𝑆𝑎𝑙𝑒𝑠
Total asset turnover = (times)
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
2.5 Capital intensity
Finally, Binh Minh’s capital intensity, which reveals the number of assets the business
requires to generate $1 in sales, fell from 0.72 to 0.65 in the three years mentioned. This means
that the company was spending less on assets to generate revenues, thereby becoming less capital-

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intensive. Meanwhile, Tien Phong Plastic Joint Stock Company’s capital intensity had an increase
of 0.18 times in the three years, which proves the company had to spend more on assets to generate
revenues, or the company had bought new assets at that time.

𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
Capital intensity = (times)
𝑆𝑎𝑙𝑒𝑠

3. Long-term solvency ratios

Long-term solvency ratios are used to assess a company's capacity to fulfill its debts in the
long run.
3.1 Total debt ratio
Looking at the total debt ratio of Binh Minh JSC, we can see that the company did not
leverage as much debt as Tien Phong JSC. Over the 3 years, debt value accounted for only 13% to
18% of the firm while the numbers for Tien Phong amounted to 54%.

𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦

Total debt ratio = (times)
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
3.2 Times interest earned (TIE) and cash coverage ratios

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 Besides, the TIE and cash coverage ratios are other common measures of debt. These two
metrics are similar in the way that they both measure how well a company's interest payments are
met. The key difference is that the TIE ratio uses EBIT, which means non-cash expenses like
depreciation and amortization are subtracted, and the cash coverage ratio uses EBITDA. For this
reason, the latter seems more appropriate for calculating the cash flow to meet financial
obligations. It can be seen that the figures for the cash coverage ratio of Binh Minh were truly
high. The company’s interest bill was covered 17,014.46 times over in 2020, compared to merely
11.05 times for Tien Phong. This also explains why Binh Minh’s debt-to-asset ratio was so low.
That is, the company borrowed a little amount of debt, therefore, incurred a little amount of interest
expense.

𝐸𝐵𝐼𝑇
Times interest earned ratio = (times)
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝐸𝐵𝐼𝑇𝐷𝐴
Cash coverage ratio = (times)
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
3.3 Debt-to-equity ratio and Equity multiplier
Finally, the debt-to-equity ratio compares the value of total liabilities against the total
shareholders’ equity. As Binh Minh leverages little debt, this ratio should be low and it actually
was. From 2018 to 2020, the figures ranged from a mere 15% to 22%, much lower than that of
Tien Phong. Similarly, the equity multiplier of Binh Minh is also lower than that of the rival
company.

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 𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
Debt-equity ratio = (times)
𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦

𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
Equity multiplier = = 1 + Debt-equity ratio (times)
𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦

4. Profitability ratios
Profitability ratios are used to measure a firm’s ability to generate profits through utilizing
its assets and managing its operations efficiently. In general, Binh Minh Plastics’ profitability
showed its acceleration after the course of three years.
4.1 Profit margin
Regarding the profit margin, BMP had to undergo a slight fluctuation while NTP
experienced a steady growth. However, overall, BMP still possessed a higher profit margin than
NTP throughout the three-year period. As profit margin ratio is used to determine how effectively
a firm can convert sales into income, it appears that BMP had better overall financial management
than NTP. In 2018, BMP’s profit margin reached 10.35% which was 3.04% higher than that of
NTP. The figure of BMP decreased by 0.62% in 2019 while the one of NTP continued to accelerate
from 7.31% to 8.54% in the same year. At the end of the period, BMP’s profit margin rose again
to 11.12% and that was the highest recorded number from 2018 to 2020. Likewise, NTP’s profit
margin also had an increase to 9.62% but ultimately, it was not significant enough to outweigh
BMP.

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 𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Profit margin = (%)
𝑆𝑎𝑙𝑒𝑠

4.2 Return on assets (ROA)

In terms of ROA, which reflects a company’s ability to manage its assets to make profits,
both companies showed an upward trend but the gap between the two firms’ figures was noticeably
different. In 2018, BMP’s return on assets started at 15.21%, which was over two times higher
than that of NTP. BMP then underwent a marginal decrease to 14.83% in 2019 because BMP’s
assets expanded but inversely, its net income declined; at the same time, NTP experienced a rise
of 2.19% to reach 8.99%, thus narrowing the distance with the competitor BMP. The three-year
period ended with an increase of both companies’ ROA since BMP’s grew by 2.46% to peak at
17.29% whereas NTP rose at a similar rate (2.49%) to finally reach 11.48%.

𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Return on assets (ROA) = (%)
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
4.3 Return on equity (ROE)
Lastly, ROE is the ratio that tells how efficiently a firm uses invested cash to generate
profits. In general, BMP showed its superiority in ROE compared to NTP, meaning that BMP

15
was more efficient at making profits with its capital. BMP’s ROE almost remained stable in 2018
and 2019 as the numbers of the two years showed very little change (17.43% and 17.12%
respectively). NTP, on the other hand, had an increase of 1.21% between 2018 and 2019. The
year 2020 saw an acceleration of both companies’ return on equity as BMP’s ROE rose from
17.12% to 21.14% (approximately 4% growth) and that of NTP also increased by 1.34 % (from
15.93% to 17.27%).

𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Return on equity (ROE) = (%)
𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦

5. Market value ratios

Market value measures are the financial metrics used to evaluate the company’s stock
worth. These ratios are mostly observed by investors to determine if the current market share prices
correspond to the company's performance, thus to decide should they buy or sell the stock they
intend to invest in.
5.1 P/E ratio
The P/E ratio indicates the market’s willingness to pay for a company’s stock based on its
previous or prospective profits. As demonstrated in the Common-size Income Statement analysis,
BMP’s earnings per share varied moderately between the years together with its price per share
moving in the same direction, causing its P/E ratio to change accordingly. Specifically, BMP’s
price per share went from 52,657 VND (in 2018) down to 45,236 (in 2019) and way back to 62,627
(in 2020). The P/E ratio was respectively 10.08 in 2018, 8.76 in 2019 and 9.81 in 2020, illustrating
BMP’s significant prospects for future growth in its industry. However, the firm’s stock price
relative to earnings is not as high as NTP in all years except 2019. As earnings per share of NTP
was less than that of BMP with approximately 3,525 VND compared to 5,591 VND on average,
NTP’s stock was in higher demand compared to that of BMP.

16
 𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
P/E = (times)
𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

5.2 Market-to-book ratio

Additionally, the market-to-book ratio compares the price of a stock to its book value. Both
companies experienced the same fluctuating scenario and all figures were higher than 1, depicting
they were overvalued. Yet, BMP’s figures were higher than those of competitor NTP, with 2020
approaching more than 2, suggesting that investing in BMP will be more expensive. Indeed, the
P/E ratio analysis above also highlights that the price per share of Binh Minh was much larger than
NTP.

𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

Market-to-book Ratio = (times)
𝐵𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

5.3 EV multiple

Finally, EV multiple is a financial indicator of how much it would cost to acquire all of a
company's outstanding stock as well as pay down its debts. Rather than just focusing on the market
value of outstanding shares of stock, EV adds the market value of outstanding interest bearing debt
less cash on hand. According to BMP, EV leveled 4,256 billion (in 2018), then 3,770 billion (in
2019) and 5,482 billion (in 2020). As illustrated from excel calculation, EBITDA climbed

17
progressively after three consecutive years, which led to BMP’s EV Multiple decreasing from 6.06
times to 5.26 times and then rising to 6.34 times. For a publicly traded company, BMP and NTP’s
EV Multiple were considered a general average in the industry.

𝐸𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑉𝑎𝑙𝑢𝑒
EV Multiple = (times)
𝐸𝐵𝐼𝑇𝐷𝐴

IV. Conclusion
This report has examined important financial statements and indicators to understand
carefully BMP’s financial health and standing position compared to its rival. Additionally, analysis
from each ratio is necessary for stakeholders and BMP to make decisions about the business. In
general, the efficiency ratios of Binh Minh Plastics Joint Stock Company show that the company
has a stable growth, which means that the company does understand how to conduct its business,
not very much but this indicates that the company knows how to evaluate and monitor the
company's effectiveness in managing production, warehousing, and distribution of products.
Another ratio we need to note is the liquidity ratios which the company has considerably higher
figures than its rival NTP, showing that the short-term solvency of the business is in good
condition. Apart from that, long-term solvency ratios specify that the company has a very low
amount of debts compared to its rival, Tien Phong Plastic JSC. Besides, the profitability ratios of
the company have all arisen during the period of 2018-2020, which exposes that the company was
becoming more efficient at generating profit. Lastly, market value ratios indicate high valuation
of BMP’s shares leading to its stock being more preferable compared to its rival.

18
 V. References
Binh Minh Plastics Joint Stock Company. (2017). Annual report 2017. Retrieved from

https://www.binhminhplastic.com.vn/res/project/download/AR%20BMP2017_ENG_Web.pdf

Binh Minh Plastics Joint Stock Company. (2019). Annual report 2018. Retrieved from

https://www.binhminhplastic.com.vn/res/project/download/AR%202018_ENG_WEB_25%2006

%2019.pdf

Binh Minh Plastics Joint Stock Company. (2020). Annual report 2019. Retrieved from

https://www.binhminhplastic.com.vn/res/project/download/AR_BMP_ENG_20082020_Vietchec

k.pdf

Binh Minh Plastics Joint Stock Company. (2021). Annual report 2020. Retrieved from

https://www.binhminhplastic.com.vn/res/project/download/BCTC_BMP%202020_ENG_WEB.p

df

Binh Minh Plastics Joint Stock Company. (2021). Nghị quyết bổ nhiệm Ông Chaowalit

Treejak giữ chức Phó Tổng Giám Đốc. Retrieved from

https://www.binhminhplastic.com.vn/Uploads/File/QHCD/2021/13.%20Resolution%20appointin

g%20DGD%20Chaowalit-sign.pdf

BMP: Công ty Cổ phần Nhựa Bình Minh | Tin tức và dữ liệu doanh nghiệp. (2021,

December 2). CafeF.Vn.

https://s.cafef.vn/hose/BMP-cong-ty-co-phan-nhua-binh-minh.chn

Corporate Finance Institute. (2020, March 2). Earnings Per Share Formula (EPS).

https://corporatefinanceinstitute.com/resources/knowledge/finance/earnings-per-share-eps-

formula/

19
 NTP : Công ty Cổ phần Nhựa Thiếu niên Tiền Phong | Tin tức và dữ liệu doanh nghiệp.

(2021, December 2). CafeF.Vn. https://s.cafef.vn/hastc/NTP-cong-ty-co-phan-nhua-thieu-nien-

tien-phong.chn

Oanh P. K. (2021). Doanh nghiệp lớn là gì? Retrieved from

https://luathoangphi.vn/doanh-nghiep-lon-la-gi

Tien Phong Plastic Joint Stock Company. (2019a). Annual report 2018 (part 1).

Retrieved from

http://admin.nhuatienphong.net/img/posts/1_c21f4a6ac3ee393ca96c3fd64133a068B%C3%A1o

%20C%C3%A1o%20Th%C6%B0%E1%BB%9Dng%20Ni%C3%AAn%20NTP%202018%20(

Trang%202-77).pdf

Tien Phong Plastic Joint Stock Company. (2019b). Annual report 2018 (part 2).

Retrieved from

http://admin.nhuatienphong.net/img/posts/1_af4a241deca55a61720d0590266d40d7B%C3%A1o

%20C%C3%A1o%20Th%C6%B0%E1%BB%9Dng%20Ni%C3%AAn%20NTP%202018%20(

Trang%2078-125).pdf

Tien Phong Plastic Joint Stock Company. (2019c). Annual report 2018 (part 3).

Retrieved from

http://admin.nhuatienphong.net/img/posts/1_1cd1727c57837f12d701eeb8bcb1da45B%C3%A1o

%20C%C3%A1o%20Th%C6%B0%E1%BB%9Dng%20Ni%C3%AAn%20NTP%202018%20(

Trang%20126-183).pdf

Tien Phong Plastic Joint Stock Company. (2020). Annual report 2019. Retrieved from

http://admin.nhuatienphong.net/img/posts/1_039f2696ae341f6c0fbb385f4bf11e7dBCTN%20201

9%20(EN%20-%20Final).pdf

20
 Tien Phong Plastic Joint Stock Company. (2021). Annual report 2020. Retrieved from

https://admin.0.net/img/posts/1_9e232a5fa49ab8b21a54389f3b1ee8daBCTN%202020%20(EN)_

Final_Web.pdf

Tuovila, A. (2020). Common size income statement definition. Retrieved from

https://www.investopedia.com/terms/c/commonsizeincomestatement.asp

21
VI. Appendix
1. Balance sheet
Binh Minh Plastics Joint Stock Company

CONSOLIDATED BALANCE SHEET

As at 31 December, 2018, 2019, and 2020

Codes 2018 2019 2020 Unit: VND

Total current assets 100 1,806,688,352,687 1,501,804,754,804 2,128,869,195,093

Total non-current assets 200 1,005,510,236,574 1,348,102,393,552 893,876,360,089

Total assets 270 2,812,198,589,261 2,849,907,148,356 3,022,745,555,182

Liabilities and Owner's

equity 440 2,812,198,589,261 2,849,907,148,356 3,022,745,555,182

Total current liabilities 310 358,546,067,527 357,538,491,866 527,728,036,413

Total non-current liabilities 330 0 23,085,077,839 23,492,876,108

Total stockholders' equity 410 2,453,652,521,734 2,469,283,578,651 2,471,524,642,661

Tien Phong Plastic Joint Stock Company

CONSOLIDATED BALANCE SHEET

As at 31 December, 2018, 2019, and 2020

Codes 2018 2019 2020 Unit: VND

Total current assets 100 2,663,120,671,142 2,363,188,726,746 1,678,805,704,398

Total non-current assets 200 2,213,174,513,015 2,189,130,945,492 2,216,613,156,937

Total assets 270 4,876,295,184,157 4,552,319,672,238 3,895,418,861,335

Liabilities and Owner's

equity 440 4,876,295,184,157 4,552,319,672,238 3,895,418,861,335

Total current liabilities 310 2,387,372,889,586 1,854,109,589,636 1,270,673,123,230

Total non-current liabilities 330 236,416,731,344 130,790,829,033 35,457,201,151

Total stockholders' equity 410 2,252,505,563,227 2,567,419,253,569 2,589,288,536,954

2. Income statement
22
 Binh Minh Plastics Joint Stock Company

INCOME STATEMENT

For the year ended 31 December, 2018, 2019, and 2020

2018-2019 2019-2020
Codes 2018 2019 2020
change change

Total
01 4,129,972,734,326 4,342,954,953,524 4,700,439,808,827 212,982,219,198 357,484,855,303
revenue

Revenue
02 210,335,296,270 5,615,542,906 14,799,482,422 -204,719,753,364 9,183,939,516
deduction

Net
10 3,919,637,438,056 4,337,339,410,618 4,685,640,326,405 417,701,972,562 348,300,915,787
revenue

COGS 11 3,047,590,783,016 3,349,334,639,351 3,438,658,560,035 301,743,856,335 89,323,920,684

Gross
20 872,046,655,040 988,004,771,267 1,246,981,766,370 115,958,116,227 258,976,995,103
profit

Net
operating 30 529,053,299,040 528,595,575,510 654,247,437,965 -457,723,530 125,651,862,455
profit

Total
expenses
(before 369,436,546,175 498,319,369,018 672,781,627,602 128,882,822,843 174,462,258,584
income
taxes)

Non-
operating 40 867,359,409 681,897,038 2,292,597,290 -185,462,371 1,610,700,252
gains

Net
427,610,187,562 422,766,296,917 522,585,571,930 -4,843,890,645 99,819,275,013
income

EPS 70 5,224 5,164 6,384 -60 1,220

Tien Phong Plastic Joint Stock Company

INCOME STATEMENT

For the year ended 31 December, 2018, 2019, and 2020

23
 2018-2019 2019-2020
Codes 2018 2019 2020
change change

Total
01 4,534,643,996,134 4,788,713,095,640 4,646,209,462,100 254,069,099,506 -142,503,633,540
revenue

Revenue
02 14,998,541,997 28,851,422,791 160,098,462,870 13,852,880,794 131,247,040,079
deduction

Net revenue 10 4,519,645,454,137 4,759,861,672,849 4,486,110,999,230 240,216,218,712 -273,750,673,619

COGS 11 3,188,696,872,956 3,325,381,674,138 3,097,944,643,592 136,684,801,182 -227,437,030,546

Gross
20 1,330,948,581,181 1,434,479,998,711 1,388,166,355,638 103,531,417,530 -46,313,643,073
profit

Net
operating 30 376,354,732,283 467,663,936,871 520,926,859,859 91,309,204,588 53,262,922,988
profit

Total
expenses
(before 990,856,492,224 1,002,147,466,084 908,043,749,043 11,290,973,860 -94,103,717,041
income
taxes)

Non-
operating 40 3,490,588,409 3,522,498,055 2,491,817,210 31,909,646 -1,030,680,845
gains

Net income 331,517,043,394 409,025,992,342 447,189,022,322 77,508,948,948 38,163,029,980

EPS 70 3,715 4,167 3,387 452 -780

3. Liquidity ratios
Binh Minh Plastics Joint Stock Company

Liquidity Ratios

2018 2019 2020 2018-2019 change 2019-2020 change Unit: Times

Current ratio 5.04 4.20 4.03 -0.84 -0.17

Quick ratio 3.46 2.93 3.28 -0.53 0.35

Cash ratio 1.15 0.88 0.37 -0.27 -0.51

24
 Tien Phong Plastic Joint Stock Company

Liquidity Ratios

2018 2019 2020 2018-2019 change 2019-2020 change Unit: Times

Current ratio 1.12 1.27 1.32 0.16 0.05

Quick ratio 0.70 0.70 0.81 0.00 0.12

Cash ratio 0.03 0.16 0.17 0.13 0.01

4. Efficiency ratios
Binh Minh Plastics Joint Stock Company

Efficiency Ratios

2018-2019 2019-2020
2018 2019 2020 change change Unit

Inventory turnover 5.37 7.38 8.67 2.01 1.29 times

Days' sales in
inventory 67.95 49.46 42.08 -18.49 -7.38 days

Receivables
Turnover 6.89 12.16 14.57 5.27 2.41 times

Days' sales in
receivables 52.98 30.02 25.05 -22.96 -4.97 days

Total asset turnover 1.47 1.52 1.56 0.06 0.03 times

Capital intensity 0.68 0.66 0.64 -0.02 -0.01 times

Tien Phong Plastic Joint Stock Company

Efficiency Ratios

2018-2019 2019-2020
2018 2019 2020 change change Unit

Inventory turnover 3.20 3.10 4.81 -0.11 1.71 times

Days' sales in
inventory 113.95 117.86 75.89 3.91 -41.97 days

25
 Receivables
Turnover 2.93 5.00 5.71 2.07 0.72 times

Days' sales in
receivables 124.73 73.06 63.90 -51.67 -9.16 days

Total asset turnover 0.93 1.05 1.19 0.12 0.14 times

Capital intensity 1.08 0.95 0.84 -0.12 -0.11 times

5. Long-term solvency ratios

Binh Minh Plastics Joint Stock Company

Long-term solvency ratios

2018-2019 2019-2020
2018 2019 2020 change change Unit: times

Total debt ratio 0.13 0.13 0.18 0.01 0.05

Debt - Equity ratio 0.15 0.15 0.22 0.01 0.07

Equity multiplier 1.15 1.15 1.22 0.01 0.07

Times interest earned

(TIE) ratio 1,813.14 4,229.32 12,913.72 2,416.18 8,684.40

Cash coverage ratio 2,402.76 5,727.81 17,014.46 3,325.05 11,286.65

Tien Phong Plastic Joint Stock Company

Long-term solvency ratios

2018-2019 2019-2020
2018 2019 2020 change change Unit: times

Total debt ratio 0.54 0.44 0.34 -0.10 -0.10

Debt - Equity ratio 1.16 0.77 0.50 -0.39 -0.27

Equity multiplier 2.16 1.77 1.50 -0.39 -0.27

Times interest earned

(TIE) ratio 4.55 5.11 8.84 0.56 3.73

Cash coverage ratio 5.79 6.41 11.05 0.62 4.64

26
 6. Profitability ratios
Binh Minh Plastics Joint Stock Company

Profitability Ratios

2018-2019 2019-2020
2018 2019 2020 change change

Profit margin 10.35% 9.73% 11.12% -0.62% 1.38%

Return on assets (ROA) 15.21% 14.83% 17.29% -0.37% 2.45%

Return on equity (ROE) 17.43% 17.12% 21.14% -0.31% 4.02%

Tien Phong Plastic Joint Stock Company

Profitability Ratios

2018-2019 2019-2020
2018 2019 2020 change change

Profit margin 7.31% 8.54% 9.62% 1.23% 1.08%

Return on assets (ROA) 6.80% 8.99% 11.48% 2.19% 2.49%

Return on equity (ROE) 14.72% 15.93% 17.27% 1.21% 1.34%

7. Market value ratios

Binh Minh Plastics Joint Stock Company

Market value ratios

2018-2019 2019-2020
2018 2019 2020 change change Unit: times

P/E ratio 10.08 8.76 9.81 -1.32 1.05

Market-to-book ratio 1.76 1.50 2.07 -0.26 0.57

EV multiple 6.06 5.26 6.34 -0.80 1.08

Tien Phong Plastic Joint Stock Company

Market value ratios

2018 2019 2020 Unit: times

2018-2019 2019-2020

27
 change change

P/E ratio 10.89 8.26 10.62 -2.63 2.36

Market-to-book ratio 1.60 1.10 1.64 -0.51 0.54

EV multiple 9.30 6.10 6.60 -3.20 0.50

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29